Callidus Softwr has a market cap of $257.2 million; its shares were traded at around $7.91 with and P/S ratio of 3.1. Callidus Softwr had an annual average earning growth of 2.3% over the past 5 years.
Highlight of Business Operations:Cost of Recurring Revenues. Cost of recurring revenues increased by $6.6 million, or 25%, in 2011 compared to 2010. The increase was primarily due to a $2.8 million increase in stock-based compensation expense as a result of retention, merit and new hire grants during 2010 and 2011. Personnel-related costs increased by $2.2 million in 2011 due to increased headcount as a result of acquisitions and strategic hires during 2011. Our professional fee related expenses increased by $1.9 million in 2011 compared to 2010, which was primarily driven by the increase in contractor expenses to support increased subscription services and acquisitions during 2011. Our offshore third-party technical services and support expenses also increased by $0.8 million compared to 2010 to support increased subscription service. This change resulted in a decrease in data center costs of $2.0 million in 2011 compared to 2010. Depreciation and amortization expenses increase by $0.7 million and maintenance costs by $0.6 million in 2011 compared to 2010, mainly as a result of our 2011 acquisitions. The costs associated with supporting our on-demand subscription service are generally higher than our on-premise license customer as we are responsible for the full operation of the software in our hosting facility.
Sales and Marketing. Sales and marketing expenses increased by $4.0 million, or 24%, in 2011 compared to 2010. The increase was primarily driven by increased personnel-related costs of $1.9 million and increased marketing events and programs of $0.2 million. The increase was also due to increased headcount resulting from our 2011 acquisitions and higher commission expense resulting from increased sales. Travel related expenses increased by $0.4 million due to the increased sales activities and increased products offerings due to our 2011 acquisitions. Stock-based compensation expense increased by $1.0 million in 2011, due to new hire, merit and retention stock grants during 2010 and 2011. Commission expenses associated with on-demand arrangements are deferred and amortized over the term of the contract as the related revenue is recognized, whereas commission expenses related to perpetual license sales are incurred in the period the transaction occurs. Commission expenses associated with term licenses have the same treatment as commission expenses associated with on-demand subscription arrangements.
Recurring Revenues. Recurring revenues which consists of on-demand subscription revenue, term license revenues, and maintenance revenues, increased by $6.7 million, or 14%, in 2010 compared to 2009. The increase was primarily due to the growth in our on-demand subscription revenues and our term license revenues, which together increased by $7.1 million, or 28%, as compared to the prior year. Maintenance revenues associated with on-premises licenses decreased by $0.4 million in 2010 compared to 2009, which was primarily due to a number of on-premise license customers converting to our on-demand service as well as decreased license sales to new customers, partially offset by a small benefit from the acquisition in 2010.
In 2011, net cash used in investing activities was $40.4 million compared to $3.0 million in 2010. The cash used in our investing activities in 2011 was primarily related to $17.4 million net outflows from the sales or maturities and purchases of investments, $19.5 million from our acquisitions, $1.5 million in payments for intangible assets and $2.0 million of equipment expenditures.
In 2010, net cash used in investing activities was $3.0 million compared to $20.7 million in 2009. The cash used in our investing activities in 2010 was primarily due to $1.9 million from our acquisitions, $1.8 million in payments for intangible assets, and $2.8 million of equipment expenditures, partially offset by $4.1 million net proceeds from the sales or maturities and purchases of investments.
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